MIA: Encyclopedia of Marxism: Glossary of Terms
Micro-economic reform was the principal strategy for class struggle embraced by the bourgeois following the failure of Keynesianism in the late-1960s and Monetarism in the mid-1980s. Micro-economic reform meant no longer relying on the “blunt instrument” of macroeconomic fiscal or monetary policy in favour of efforts to break the resistance of the working class “in the workplace”.
Bourgeois economic science is composed of two branches: Microeconomics which deals with the behaviour of individual ‘economic agents’, what makes workers work harder, wage-bargaining, why people buy or sell at a given price and so on, and Macroeconomics which deals with aggregates such as Gross Domestic Product, unemployment level, money supply, government spending and so on. Somewhat like the situation when physics had relativity theory and quantum physics, the two ends of the spectrum used incommensurable categories and could not “talk” to one another. Macroeconomics used to rest on totally unrealistic “models” of micro-economic behaviour, but more and more developed separately, resting on concepts through which the actions of individuals were quite invisible. Contrariwise, the ever intricate theories of microeconomics led to intractable complexities as soon as it was attempted to draw macro-conclusions from the analyses.
Keynesian macroeconomics, which focussed on fiscal methods of economic regulation, was thrown into disrepute in the wake of the break-down of the Bretton Wood arrangements in 1968-73 and capitalist governments embraced its opposite, monetarism. The failure of monetarism to extricate the major western capitalist economies from Stagflation, and then the stock market crash of October 1987 forced the bourgeoisie to look elsewhere. Among other things, the financial world had become far too complex for monetarist measures and instruments to control, and the 1987 crash, brought on by computers that had been programmed to make instant investment decisions in competition with one another, was a clear demonstration of this.
The crisis had to be approached on two fronts: more sophisticated methods of dealing with the financial markets had to be developed, (The Chicago School of “political economists” with their operations research, complexity and game theory, were the best hope here.) and on the other hand, the working class had to be brought under control ‘at the coal face’ with improved management techniques, rather than simply relying on high unemployment and centralised wage bargaining to do the job. In this respect the success of Japanese industry at the time drew a lot of attention and Toyotist management techniques were widely adopted in Europe and America. A range of social psychology theories, much of it developed in the Peace Movement and in New Age circles suddenly became popular in the boardrooms. It was as if capitalism had discovered religion – Jungian Myer-Briggs Personality Types, Group Dynamics, Behaviourism, and 101 gurus all marketing their own brand of managerial self-help.
The middle class, or sometimes “the middle-classes”, is a very general term indicating all those classes which lie in between the ruling class and the producing class – in capitalist society: the bourgeoisie and the proletariat.
This middle position gives to the middle-classes their specific character, apart from the fact of their diversity, and the fact that whether or not they form a majority of the population, neither of the major classes can prevail over the other without winning a majority of the middle-classes to their side.
“In essence,” capitalism has two classes – bourgeoisie and proletariat, but no society can survive if oppressed and oppressor stand opposite each other like that (see concentration of capital), and especially since the late nineteenth century, the leadership of the bourgeoisie has taken steps to sustain a “buffer” between itself and the proletariat, and to introduce into the proletariat divisions which help soften the contradictions of capitalist society.
Restricting ourselves to modern capitalist society, the middle-classes may include:
- the small business people (Petit-bourgeoisie), the “little people”, who like the proletariat, do real work (private labour), but possibly also employ wage-workers, thereby sharing social interests with the bourgeoisie, but being “little people” are constantly being “done over” by the big firms, and frequently find themselves thrown into the ranks of the proletariat;
- the “professional middle-class”, who may earn a salary, in which case they are “strictly speaking” workers, or are self-employed but enjoy a share of the proceeds of exploitation in the form of high incomes and a life-style; this class is crucial in the ideological production of the relations of production;
- the small farmers or Peasantry as they used to be called, who work like horses, but like the bourgeoisie, own their own means of production (land) and sell commodities; in some cases they enjoy politically-motivated protection from the state with subsidies and so on; living in the countryside they are often isolated from the political life of the cities; in many countries this class is facing bankruptcy and being propelled into the ranks of the proletariat; but in good times, they may grow to become large-scale landowners;
- all sorts of white-collar workers, strictly speaking forming an upper layer of the proletariat, who are engaged in supervision and management of the workers, and consequently often share the standpoint of “their betters”; the ranks of these classes has been swelled throughout the past century by Taylorism, the development of the division of labour and the Commodification of the labour process;
- and so on and so forth.
It should be noted however, that “middle-class” is not a subjective denotation, but is defined by the position of a class in the dominant relations of production, and the social interests which flow from that.
Bourgeois sociology determines class differently: when people are asked which class they are, the majority always reply “middle class”, just as people used to think the Earth was the centre of the Universe and “the truth lies in the middle”, etc., etc. Despite the fact that identity is often middle-class, class-consciousness among the middle-class is almost a contradiction in terms, as people finding themselves located in the middle, usually identify themselves with one side or the other when it comes to politics.
Socialists who take office in bourgeois governments, named after the French Socialist Millerand who joined the bourgeois French government of Waldeck-Rousseau in 1899.
Synonymous with Consciousness, but often used with a connotation of being a substance or extra-human entity. Hegel explains in the Philosophy of Right: “Mind is the nature of human beings en masse and their nature is therefore twofold: (i) at one extreme, explicit individuality of consciousness and will, and (ii) at the other extreme, universality which knows and wills what is substantive. § 264 ... The history of Mind is its own act. Mind is only what it does, and its act is to make itself the object of its own consciousness. In history its act is to gain consciousness of itself as Mind, to apprehend itself in its interpretation of itself to itself. § 343.”
Stafford Cripps coined the term in relation to the British economy in 1949, and “Mixed Economy” has been used to describe the vision of a very wide spectrum of political currents particularly of the second half of the twentieth century.
In the earliest stages of development of capitalism, while capital is as yet unable to build infrastructure and provide social services by its own methods, “mixed economy” is the rule, whether in 18th century Britain or 20th century Egypt.
For several decades after the Second World War, “mixed economy” was widely embraced as a means of building and maintaining capital-intensive manufacturing industries and national public utilities.
Although “mixed economy” is a fair description of the kind of economy inevitable immediately after the seizure of power by the working class, and is clearly envisaged in the Communist Manifesto, it can only be an unstable and transitory formation.
The “mixed economies” of post-World War Two Europe, represented a retreat in the wake of the destruction of the war and the immediate prospect of socialist revolution around the world. As soon as capital found that it could make a profit from the public enterprises, they were privatised; and if they couldn’t, they were shutdown and re-opened in countries where cheaper labour was available.
When the working class takes state power, the large enterprises are easily nationalised and placed under the control of the working class, but it is inevitable that managing the myriad of small enterprises without the use of the market, poses challenging problems. However, Marxists understand that markets inevitably foster inequality, capital accumulation and bourgeois consciousness, and so long as the market exists, political struggle will be necessary to regulate and contain its negative effects, and this can only be a limitation on freedom.